Purchasing Real Estate at 90% Discounts
Getting Into REO’s
CFO Looking at Actual REO’s On Site
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REIC’s founder, Kris Krohn began purchasing Bulk REO’s from distressed banks in May 2008.
“At first glance it’s exciting to know your buying something at a massive discount. I’ve seen homes literally that can be bought for merely hundreds of dollar. At the same time, the REO is a lot of work if you want to hold long term. There isn’t some magical management system that can manage hundreds of homes in an automated fashion. It has to be done one home at a time.”
Here are some homes from to Kris’ original bulk REO Purchases:
REIC Founder Discusses How REO’s All Began:
The Perfect REO Business Plan Today:
REIC’s Acquisition Team receives Bulk REO Packages on a weekly basis. These REO tapes often come directly from the banks themselves and are thoroughly researched and analyzed to ensure deep enough discounts, reasonable property condition and immediate title transfer.
CEO Receives REO Packages Weekly:
Actual REO Acquisitions and Contracts:
Today, REIC purchases REO’s on a weekly basis. These homes go through a RECYCLING PROCESS which includes:
1. Purchase REO pool of homes
2. Sell the homes that require too much work
3. Repair homes we are holding
4. Rent out free and clear, unleveraged homes
5. Receive pure cash-flow
Purchase, Repair, Rent: Detroit Michigan
REO Contract File
REO Random Sampling of Properties and Rents
REO General Manager Looking at REO’s On Site:
REO Exit Strategy
Kris Krohn believes that even though the stock market will be an extremely risky and volatile investment for retirement accounts for the next decade, real estate itself will see a tremendous return. (Technically speaking Krohn actually believes that the stock market is a “Stupid, idiotic, massively risky, unsecure, con that Americans got duped into.”)
“Only the market can determine when we can’t buy REO’s anymore and when we can cash out for our biggest return. We allow the market to dictate the when, and then we act. It took 5 years for the real estate market to return after the Great Depression when money and credit became readily available again. If I had to guess our economy will take some time to recover but many indications point to 2014 being a good year for banks to have re-stabilized and for money to flow more freely in our economy culminating in a real estate value bounce back.”
“However if the market doesn’t come back ever, which would defy the 3,000 year k-wave-cycle then we’ll just have to be happy receiving a pure cash flow on free and clear real estate—something people wait 30 years for when they get into rental.”
Window of Opportunity
REIC has a significant amount of data, history and success with purchasing bulk REO’s. Much of the information is proprietary and confidential. Additional and complete information regarding REO’s is available only to REIC clients. To learn more about how you can get involved on one of the best alternatives to typical 401K, IRA and other retirement vehicles click here to come to an REIC Event
Join our investment program now to access these once-in-a-century deals.
REIC Client Section
If you are a client of REIC and are ready to begin your education on REO’s Click Here
Midwest Trip March 29th – April 2nd
Mike Krohn, CFO of REIC regularly audits REO National to ensure the best deep discounts in the acquisition and REO recycling process. Mike and Brittani Badders, General Manager for REO National spent a week performing onsite audits.
The objective of this trip was to:
- Acquire 50 more homes in the midwest
- Strengthen relationship with sellers
- Enhance relationships with property managers/contractors
Arriving in Cleveland
Buying Guidelines for the Midwest
- Purchasing Range: $3,000-$12,000
- Minimum 3 bedroom to maximize rents
- Structurally sound with cosmetic repairs. Typical repairs include paint, flooring, drywall and minor landscaping
- Cash flow to recover purchase and repairs within 24 months
- Purchasing in good rentalbe neighborhoods
Investment Timetable
When Mike came on board REIC as CFO in February 2009, he believed the REO was too good to be true. Now after the midwest audit he is convinced that now is the best time and the best use of any investment capital, 401K’s, IRA’s and savings.
Samples of REO Rentals Acquired
Samples of Good Neighborhoods
Samples of High-End Homes Purchased within Guidelines
Lakefront Property Purchased at 90% DIscount
Repairs on REO’s
Most homes purchased in large bulk sales require some repairs to make rental ready. An in-depth analysis is performed prior to repair to ensure that costs are balanced with the ROI. Repairs generally take 2-4 weeks to complete.
Repairs Completed
Repairs About to Begin
Non-Single Family REO’s
While our focus is on single family homes (SFH) we also occasionally have a condo, duplex or triplex thrown in with a batch of homes. We hold onto these properties as long as they require minimal repair and are located in renting neighborhoods.
Disposing of Undesirable REO’s (JUNK)
In the process of acquiring large bundles of homes we occasionally pick up a home that does not meet our standards for our long term hold strategy. These homes are immediately liquidated after assessments have been made. The homes generally require too much money for repair or are located in a less desirable part of town.
